The management of Watchdog Security Systems has calculated the following variances: $$\begin{array} { | l | r | }
\hline \text { Direct materials cost variance } & \$ 8000 \mathrm { U } \
\hline \text { Direct materials efficiency variance } & 40,000 \mathrm {~F} \
\hline \text { Direct labor cost variance } & 15,000 \mathrm {~F} \
\hline \text { Direct labor efficiency variance } & 13,500 \mathrm { U } \
\hline \text { Total variable overhead variance } & 8500 \mathrm {~F} \
\hline \text { Total fixed overhead variance } & 3500 \mathrm {~F} \
\hline
\end{array}$$ What is the total direct labor variance of the company?

Question

The management of Watchdog Security Systems has calculated the following variances: $$\begin{array} { | l | r | } 
\hline \text { Direct materials cost variance } & \$ 8000 \mathrm { U } \
\hline \text { Direct materials efficiency variance } & 40,000 \mathrm {~F} \
\hline \text { Direct labor cost variance } & 15,000 \mathrm {~F} \
\hline \text { Direct labor efficiency variance } & 13,500 \mathrm { U } \
\hline \text { Total variable overhead variance } & 8500 \mathrm {~F} \
\hline \text { Total fixed overhead variance } & 3500 \mathrm {~F} \
\hline
\end{array}$$ What is the total direct labor variance of the company?

Quizplus · Accepted Answer

The total direct labor variance is calculated by combining the direct labor cost variance and the direct labor efficiency variance: $15,000 F - $13,500 U = $1,500 F.

The Management of Watchdog Security Systems Has Calculated the Following